Cardinal Health stock gains as fiscal 2027 outlook rises

Cardinal Health reported a strong start to fiscal 2027 on November 5, with first-quarter revenue rising 5 percent year over year to 67.5 billion US dollars. The healthcare distributor also raised its full-year adjusted earnings outlook, according to the company's November 5 press release.

First-quarter performance strengthens

GAAP operating earnings increased 13 percent to 753 million US dollars, while GAAP diluted earnings per share rose 27 percent to 2.38 US dollars. On a non-GAAP basis, operating earnings increased 17 percent to 1.0 billion US dollars and adjusted diluted EPS climbed 28 percent to 3.26 US dollars.

The Pharmaceutical and Specialty Solutions segment remained the main earnings driver. Revenue grew 6 percent to 62.6 billion US dollars and segment profit increased 17 percent to 783 million US dollars, supported by brand and specialty pharmaceutical sales and a favorable contribution from the generics program.

Performance was more mixed in Global Medical Products and Distribution. Revenue was broadly flat at 3.2 billion US dollars, while segment profit fell 28 percent to 33 million US dollars because of unfavorable distribution and foreign-exchange effects. Cardinal Health's Other businesses delivered stronger momentum, with revenue up 7 percent to 1.8 billion US dollars and profit up 16 percent to 193 million US dollars.

Higher guidance, uneven quarterly path

Cardinal Health lifted its fiscal 2027 non-GAAP diluted EPS range to 12.80 to 13.00 US dollars from 12.40 to 12.60 US dollars previously. The new range implies growth of 17 to 19 percent against the fiscal 2026 baseline excluding the tariff refund, and 14 to 15 percent against reported fiscal 2026 results.

Management also raised its Pharmaceutical and Specialty Solutions profit-growth outlook to 10 to 12 percent from 8 to 11 percent. The expected growth range for Other profit increased to 17 to 20 percent from 15 to 18 percent, while Other revenue growth is now expected at 12 to 14 percent. The company lowered its expected non-GAAP effective tax rate to 18.5 to 19.5 percent from 19.0 to 20.0 percent.

The stronger annual outlook does not imply a straight-line earnings pattern. Cardinal Health said earnings growth is expected to moderate in the second and third quarters before strengthening again in the fourth quarter, reflecting the timing of customer renewals and comparisons with the Solaris acquisition.

CVS renewal adds visibility

Cardinal Health entered a binding letter of intent to renew its pharmaceutical distribution agreements with CVS Health. The proposed renewal supports continued volume growth in the company's largest operating segment, although the announcement describes a letter of intent rather than completed agreements.

The company also completed a 500 million US dollar share repurchase program during the quarter and expects to complete the acquisition of AdaptHealth's Diabetes Health business in the third quarter of fiscal 2027. Those actions add capital-allocation and portfolio milestones for investors to monitor alongside the segment outlook.

Cardinal Health stock traded at 247.85 euros on Lang & Schwarz at 12:47 CET on Wednesday, November 11.

US healthcare and distribution shares remain the broader market context for Cardinal Health stock; see the latest S&P 500 market coverage.

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